by ChatGPT has taken the world by storm. OpenAI’s AI chatbot has captured the imagination of the world and attracted significant investment from Microsoft, which said this month it plans to invest billions in the venture and incorporate its technology into a wide range of its products.
But OpenAI’s rapid rise — it launched in late 2015 and shared ChatGPT with the public two months ago — will no doubt leave some entrepreneurs wondering if they’re doing something wrong with their lesser-known ventures.
Elad Gil, a highly respected angel investor from Silicon Valley – he made the first bets on Airbnb, Instacart and Square – believes that “the fact that ChatGPT is always down at the moment is a very good sign of the product’s adaptation to the market. It’s because too many people use it. This is a big problem to have.
Gil commented on an episode of Logan Bartlett show podcast on friday. The Google and Twitter alum noted the “problem” facing OpenAI after Bartlett, a software investor at venture capital firm Redpoint, asked him about his thoughts on product-market fit when considering the investments.
One sign he looks for is positive customer and user testimonials, he said: “It really comes out in terms of the enthusiasm that the small initial cohort has for the product.”
But he also added, “If a product breaks all the time but everyone keeps using it, there’s clearly a product-market fit,” noting that he saw it in the early days of Twitter and sees it now with ChatGPT.
On the flip side, he said, many ideas simply won’t get off the ground, no matter how much time an entrepreneur spends on them. He said the tradition in Silicon Valley that “you have to grind forever and then eventually something will work out” is wrong, noting that people have wasted years of their lives on such “bad advice.”
“People end up spending years and years and years of their lives grinding something that’s not going to work, because maybe it’s going to work if I make these three other changes, and maybe it’s going to work this month if I keep going,” he said. “For a very small number of cases this happens, but for the most part it works immediately or almost immediately.”
While it’s true that entrepreneurs may need to weather tough times during a recession, he added, “When times are good, the worst advice you can give anyone is to keep going no matter what.”
“There’s a huge opportunity cost to your time, and most things don’t work out,” Gil said. “Most of the time, you should actually figure out when to give up and when you should actually quit. It’s really hard to know.”
Meanwhile, when an idea works, it tends to work very quickly, something he’s seen repeatedly with companies he’s worked in and invested in over the years, and now sees with OpenAI and ChatGPT.
“The reality is that most companies, not all, but the vast majority of companies that I’ve been involved with and that have worked, ended up working pretty soon. And once they started working, they kept working.
He also saw how others made the same realization.
“One thing I’ve noticed is that people who’ve been working on things without product-market fit — who they thought had product-market fit — when they finally go to work on something that actually works, they realize the immense difference and the degree to which they were fooling themselves.”
In the former case, “You’re chasing everyone and every sale is creepy and everything is a nuisance,” she said, but with the latter, it’s a case of “‘Hey, people keep calling me.’ And so is this transition, and until that happens you don’t realize what that really feels like.
This story was originally published on Fortune.com
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